THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

WOLF BLITZER, HOST: It's 11 a.m. in Washington, 8 a.m. in Los Angeles, 4 p.m. in London, 7 p.m. in Baghdad. Wherever you're watching from around the world, thanks very much for joining us for "Late Edition." We'll get to my conversation with the U.S. Secretary of Homeland Security Michael Chertoff in just a few minutes. First, though, let's get a quick check of what's in the news right now. (NEWSBREAK)

BLITZER: Thanks very much, Susan. In New Orleans, Mardi Gras has begun. There are fewer parades and floats and far fewer tourists, but in a city still struggling to recover from the devastation of Hurricane Katrina, it's seen as a victory to have a celebration of any kind at all.

In contrast, there were no celebrations here in Washington this past week, as a Congressional report blasted the federal response to Katrina. The man in the hot seat, Michael Chertoff, the secretary of homeland security. I spoke with the secretary earlier today.

(BEGIN VIDEOTAPE)

BLITZER: Secretary Chertoff, thanks very much for joining us.

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: Good to be here.

BLITZER: Here's the conclusion of the House report on Katrina: "It remains difficult to understand how government could respond so ineffectively to a disaster that was anticipated for years and for which specific dire warnings had been issued for days. This crisis was not only predictable, it was predicted. If this is what happens when we have advanced warning, we shudder to imagine the consequences when we do not. Four and a half years after 9/11, America is still not ready for prime time."

Do you agree with that bottom line conclusion?

CHERTOFF: Well, I said in July before Katrina that we had a lot more work to do in preparedness. And I think that was borne out, obviously, a month later. We have made a lot of progress in a lot of areas. We've done it in intelligence sharing and certain elements of security. There were parts of the department, in fact, that worked very well in Katrina, like the Coast Guard and TSA.

But there's clearly a lot of work we have to do in a department that is still an immature department by Washington standards. It was only two years old, a little over two years old by the time Katrina hit. The Department of Defense took 40 years to get where it got. Now, I'm not suggesting we're going to wait 40 years or even four years, but I think we have to put in perspective the fact that we've come quite a distance. We have quite a distance to come -- go, as well.

BLITZER: Is the country ready for another 9/11?

CHERTOFF: Well, first of all, what we're ready to do is stop another 9/11. And that's where our intelligence sharing, our increased protective measures, what we're doing now at the border to screen. All of those things are designed to prevent a 9/11. That's the best outcome.

We've certainly learned a lot of lessons from Katrina, from Rita. Rita was better than Katrina. We're doing a better job planning. We're closer -- more closely aligned with the Department of Defense. These things would be positive things if we were to have another attack.

But we've got a lot of work to do. And one of the things I want to say, Wolf, is we're 100 days from hurricane season, and we've got to start focusing on what we're going to do to make ourselves ready for the next hurricane.

BLITZER: Here is another conclusion from the House of Representatives report: "It does not appear the president received adequate advice and counsel from a senior disaster professional. The president's homeland security team did not effectively substantiate, analyze and act on the information at its disposal." You agree with that?

CHERTOFF: Well, I think first of all there was a failure to have real, clear information at our disposal. There was a real lack of situational awareness. We didn't have the capabilities on the ground to give us real-time, accurate assessments of the physical condition of the city.

BLITZER: But you knew that for days, that this hurricane was coming towards New Orleans.

CHERTOFF: Wolf, putting these capabilities together is not a matter of putting them together in a few days. It's a matter of planning and preparing for months.

BLITZER: But there has been these tabletop exercises. There was this fictional Hurricane Pam a year earlier in which they basically outlined all of these dire consequences that nobody seems to have paid any attention to.

CHERTOFF: Well, I'm not excusing the fact that planning and preparedness was not where it should be. We've known for 20 years about this hurricane, this possibility of this kind of hurricane. So, all during the '90s and, you know, for the first half of this decade, we had opportunities to get evacuation plans in place, better communications in place. But rather than look backward, my obligation now is to make sure we do a lot of the work we need to do between now and June 1.

BLITZER: Here's what your former FEMA director, Michael Brown, said when he testified on February 10 before Congress. Listen to this.

(BEGIN VIDEO CLIP)

MICHAEL BROWN, FORMER FEMA DIRECTOR: The culture was such that I didn't think that would have been effective and would have exacerbated the problem, quite frankly, Senator.

UNIDENTIFIED MALE: Why would that...

BROWN: That's why my conversations were predominantly with the White House, because through the White House I could cut through any interagency bureaucracy to get what I needed done.

(END VIDEO CLIP)

BLITZER: He's basically saying that he ignored you. He didn't even want to talk to you during those critical hours and days when Hurricane Katrina hit, because it would have been a waste of time.

CHERTOFF: I think that's -- was a very big mistake on his part. The fact of the matter is, where things did work well was precisely because DHS brought its other assets into play. On Thursday, when we went around FEMA and constructed an air bridge to allow an evacuation from the airport instead of making people drive to Houston, it was because the department stepped in with TSA and the other assets to set that up. Coast Guard stepped forward and picked up a lot of the slack.

I think the idea that you can go this alone is -- was a huge mistake. And unfortunately, there was a price paid in terms of suffering and pain for people in New Orleans.

BLITZER: In an interview with a documentary filmmaker, he gives you this grade for the work he says you did or didn't do during that disaster.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Secretary Chertoff?

BROWN: You know, a C-minus. The secretary is a judge by training. And you can't do things like tell your disaster guy to go back to Baton Rouge and stay in Baton Rouge and never leave. That's not how you do operations. He just doesn't get it.

(END VIDEO CLIP)

BLITZER: He says you just don't get it.

CHERTOFF: Well, first of all, you know, Mike Brown has given a lot of different versions of events. And I'm not going to get into the specifics of, you know, which version we're happening to hear right now. But I do want to make a point.

First of all, I lived through 9/11. I had perhaps the best on- the-job training for dealing with a huge crisis when I was running the response to 9/11 on the law-enforcement side during those weeks after the terrorist attacks.

I do want to respond to Mr. Brown's statement that I was wrong in making him go back to Baton Rouge. On Tuesday, he was flying around with politicians. He was doing interview shows. And the basic planning, which was getting buses to come into the Superdome and pick people up, had not been done.

And it seems to me correct then, and I think it's correct now, that job one is get the planning done, make sure the buses are there. When that's done, it's completely appropriate to go around and tour around and look at the damage. And that's what Admiral Allen did when I made him the PFO. But Admiral Allen always knew what was the most important thing to get done first, and he got it done.

BLITZER: The hurricane came in on a Monday morning. That was August 29. And the levees broke, basically, that day. But you went to sleep that night, you didn't even know that the levees had broken.

CHERTOFF: Well, that's right. One of the things that was the most disturbing to me about the entire week of what happened was the fact that on Monday around 7:00, I got a situation report that specifically said, there hasn't been any demonstration of a substantial breech of the levees.

It was one of the things I was, frankly, concerned about during Monday. So I breathed a sigh of relief. I figured, well, we have avoided at least one really bad outcome.

And of course, I was very disturbed to learn early Tuesday morning that there had been a substantial and irreparable breech.

That really boils down again to the fact that all decisions have to flow from proper and comprehensive information. And we didn't have that information.

And so our first job right now, as we get ready for next season, is training the people and building the capabilities to get information in real time.

BLITZER: Your critics have suggested you were disengaged, you were detached. On that Tuesday, it was August 30th, and you knew then that the levees had broken, water was coming in, the city was being flooded, tens of thousands of people were being made homeless -- you went to a bird flu conference in Atlanta.

CHERTOFF: And I'm glad to be able to correct that, because this is one of those urban legends that continues to persist.

I did two things on Tuesday. I did go, not to a bird flu conference. I did go to meet with the Health and Human Services secretary and the critical leadership of CDC on a plan for avian flu, which I think is a very serious issue.

But I also linked to the emergency operations regional center in Atlanta, which was responsible for running the hurricane response in Mississippi and Alabama. And I went to Atlanta specifically to be able to get an on-the-ground assessment of the hurricane from the people who were responsible for managing at the region.

So in fact, one of the reasons I went through with the trip was because I knew it would give me an opportunity to talk to the real operators who were watching the situation up close.

BLITZER: How many trailers are sitting in this cornfield, or cow field, whatever it is, in Hope, Arkansas, right now that FEMA, which is -- you're responsible for -- has dispatched to this area?

CHERTOFF: We staged about 10,000 -- not trailers, mobile homes. Trailers are actually -- there are tens of thousands of trailers right now being occupied by the people in the Gulf Coast. There are about 10,000 mobile homes in this field in Hope.

BLITZER: At a cost of, what, $300 million?

CHERTOFF: Well, that's the purchase price. Now, they will eventually be used. Some of them will be used with respect to areas of the Gulf that are not in the flood plains. Some of them have been used with respect to the wildfires, people who lost their homes in wildfires in Oklahoma and Texas. Some will be used in hurricane season this year, for example, if we have hurricanes in Florida or other places where there's wind damage but not flood damage. So this is not going to go to waste.

BLITZER: Why aren't they being used right now? There are so many homeless people who are being evicted from hotels and being told, you know, "You're on your own," basically.

CHERTOFF: Well, first of all, Wolf, no one is being evicted from hotels. Nobody leaves a hotel without getting a full measure of three months of rental assistance. So no one has been evicted -- no one who's eligible has been evicted from a hotel without getting a significant amount of money to find -- to pay for their rent.

Second, there are two problems with respect to mobile homes in particular. One is we obviously don't want to put them in a flood plain, because if there's another flood, you're going to lose the mobile home.

The second is there are some communities that we thought originally would take mobile homes that have decided they don't want them. And we're not going to cram mobile homes down the throats of communities in Louisiana and the Gulf -- and other parts of the Gulf Coast.

So this huge housing challenge we have has to be managed on a -- almost on an individualized basis in order to deal with what is a very serious human problem.

BLITZER: Here was the conclusion of the House report. "The secretary of homeland security became the president's principal disaster adviser responsible for enabling the president to effectively utilize his authority. Secretary Chertoff executed these responsibilities late, ineffectively, or not at all."

That's a damning indictment. Some are calling on you to resign. Are you thinking about that?

CHERTOFF: Well, Wolf, first thing, as I've said before, is I knew when I took the job there was a lot of work to be done in the department. As long as the president wants me to continue to do that work and thinks I can make a contribution, I'm going to stay at my post. Obviously, there's been a lot of criticism. I've listened to it all. Some of it I find helpful. Some of it I frankly disagree with. There's a lot of discussion about when particular documents were signed or not.

But I think the bottom line right now is to take the constructive criticism and use that to build toward, as I say, the hurricane season that is 100 days away. And we don't have a lot of time to waste before we start to address that next set of challenges.

BLITZER: Let's talk about lessons learned. Not only in terms of natural disasters, but potentially terrorism. Former New Jersey Governor Tom Kean, chairman of the 9/11 Commission, said this in early December.

(BEGIN VIDEO CLIP)

TOM KEAN, CHAIRMAN, 9/11 COMMISSION: Four years after 9/11, it is a scandal that police and firefighters in large cities still can't talk to each other reliably when they're hit with a major crisis.

(END VIDEO CLIP)

BLITZER: Is he right?

CHERTOFF: Well, first of all, Katrina was not an interoperability issue. It was an operability issue. So that's a separate set of issues.

Second, although we've got some work we have to do to promote interoperability, we have done some things. The 10 largest cities have been part of a rapid com program, which does allow for command level interoperability in terms of radio. We do have these, what they call gateway systems or repeaters, that allow us to transition from different kinds of systems that don't match directly but we can interface them through this gateway.

So we are making some steps. But I had a meeting last weekend in which I said, "Look, we are not at the level we need to be four years after 9/11." We're going to have to take some dramatic steps. We may have to force people to get together in terms of picking a particular type of technology and starting to build to that technology, as opposed to everybody exercising their right to buy their own system, you know, at will.

BLITZER: We're almost out of time, but I have to ask you about this report of outsourcing ports in the United States to a company that's based in the United Arab Emirates. Ports sold to Dubai Ports World, this company, New York, New Jersey, Baltimore, Philadelphia, New Orleans, Miami.

Listen to what Senator Chuck Schumer of New York had to say about this idea.

(BEGIN VIDEO CLIP) SEN. CHUCK SCHUMER (D), NEW YORK: Outsourcing the operations of our largest ports to a country with a dubious record on terrorism is a homeland security accident waiting to happen.

(END VIDEO CLIP)

BLITZER: And other members of Congress, including Curt Weldon, have said, "I have concerns over whether the United Arab Emirates has earned this level of confidence that the administration appears to be placing in it. This sale would transfer a vital national defense facet to a foreign nation in an unstable region."

Did you sign off on this idea?

CHERTOFF: You know, this issue comes up periodically every time a foreign-owned company wants to take over an asset that has national security significance. And there is a legal process Congress created for a committee to sit and review this. It's Treasury, Commerce, DHS, FBI is involved, and DOD is involved. We look at these transactions.

The discussions are classified. I can't get into the specifics here. But what I can tell you in general is this: We examine the transaction; we look at what the issue of the threat is. If necessary, we build in conditions or requirements that, for extra security, would have to be met in order to make sure that there isn't a compromise to national security.

As far as my agency is concerned, port security really rests principally with the Coast Guard and Customs and Border Protection. And you can be sure that any transaction that goes forward is going to be carefully reviewed, and is also going to be carefully subject to the expertise of Coast Guard and Customs and Border Protection.

BLITZER: So you're on board?

CHERTOFF: Well, this -- again, I don't want to talk about classified process, but the general process that has to work before this occurs requires a very thorough review, and, where appropriate, necessary conditions or safeguards have to be put into place.

BLITZER: So is it a done deal? Has it cleared?

CHERTOFF: Since I said it's classified, Wolf, I'm not going to go beyond my general description of the process. And certainly, Congress is welcome to look at this and can get classified briefings. You know, we have to balance the paramount urgency of security against the fact that we still want to have a robust global trading system.

BLITZER: Secretary Chertoff, thanks very much for joining us.

CHERTOFF: Wolf, good to be here.

(END VIDEOTAPE)

BLITZER: And stay tuned to CNN day and night for the most reliable news about your security. Just ahead, a United Nations report calls for the closing of the prison at U.S. Naval base at Guantanamo Bay in Cuba.

Capitol Hill Democrats calling for an investigation into domestic spying. We'll talk about oversight of U.S. intelligence with two members of the congressional committees on intelligence. They're standing by.

Then, why did Iraqi troops disappear during the fierce fighting for Falluja? We'll get the real story from the general who trained them.

Plus, this week, Iran announced it would begin to enrich uranium, a key step toward a nuclear weapon, potentially at least. United Nations Secretary-General Kofi Annan tells us what can be done to avoid a dangerous confrontation.

"Late Edition" continues right after this.

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BLITZER: A chilly but sunny day here in Washington, D.C. Welcome back to "Late Edition." There were fierce battles on Capitol Hill this week over the U.S. program of wiretapping its citizens without a warrant. What's the real story?

Republican Senator Saxby Chambliss of Georgia is on the Senate Armed Services Committee, as well as the Select Committee on Intelligence. He's joining us from Atlanta. Democratic Congresswoman Jane Harman from California is a ranking minority member of the House Intelligence Committee. She also serves on the House Committee on Homeland Security. She's joining us in Los Angeles.

Thanks to both of you for joining us. Congressman Harman, I'll start with you. Do you have confidence in the Secretary of Homeland Security Michael Chertoff?

REP. JANE HARMAN (D), CALIFORNIA: I think he's a strategic thinker. He came with high hopes from all of us. He has taken personal responsibility for Katrina. He has a huge amount of work to do. I'm ready to wait and see if he fixes his department.

In contrast, by the way, our secretary of defense continues to stonewall after these new pictures of Abu Ghraib. If I were advising President Bush, I'd say the defense department is where I'd make the cabinet change right away.

BLITZER: So you're calling on Rumsfeld to resign or be fired?

HARMAN: I think that his leadership post-war in Iraq has been very damaging to the United States.

BLITZER: So should he be fired?

HARMAN: That's the president's call, but I think if I were going to change a cabinet department, that's the one I would change.

BLITZER: Senator Chambliss, do you have confidence in Michael Chertoff?

SEN. SAXBY CHAMBLISS (R), GEORGIA: Well, good leadership means that when mistakes are made that you're willing to step up and say that sure, we did make mistakes. We've got to learn from them. We've got to move forward. You know, I think this report that came out on the House side, and I expect one to be coming out from the government reform committee on the Senate side also that will be critical, is really getting at the nerve of this and really pointing out some very serious flaws that we have. Not just in the department but in their ability to react to a disaster like this.

And certainly the secretary is where the buck stops. Do I have confidence in him? From the standpoint of him saying that mistakes were made, we've got to move forward, I do. But from the standpoint of being able to deal with a disaster and having qualified people underneath him at the time of this incident, I think it's pretty weak as evidenced by this report.

BLITZER: You heard him defend the Bush administration's decision, Senator, to outsource, in effect, port handling at six major ports in the United States to a company based in the United Arab Emirates and part owned by the government of the United Arab Emirates. Are you comfortable with that decision?

CHAMBLISS: I would have to say at this point in time, Wolf, I'm not. You know, Congress does not have a direct oversight of decisions like this, but frankly, in a post-9/11 world we should be consulted in a very deliberate manner on this.

And certainly there are classified issues that have to be dealt with, but Jane and I deal with those classified matters on a daily basis. So, I think that Congress is due some explanation about this. It's suspicious on its face, but is it the right decision? It's difficult to say. I have confidence in the administration, but I just think Congress should be consulted.

BLITZER: What do you think, Congresswoman?

HARMAN: I think it's stunning, and I'm very disturbed by it. It's not that I would be against foreign shippers using our ports. We've had a lot of controversy about Chinese shipping companies on the West Coast. But my district surrounds the Port of Los Angeles, which, with the Port of Long Beach are the largest container ports on the planet. And I would not like Dubai or some other foreign government running those ports.

So I think the intelligence committees need classified briefings ASAP and this decision should be suspended until Congress can carefully review it. I would hope the administration would want to hold off until they had Congress on their side.

BLITZER: The U.N. secretary-general, following a U.N. report, Congresswoman, this week suggesting the United States shut down the Guantanamo Bay prison. A very damning report put out by the United Nations. Listen to what Kofi Annan said after that report was released.

Actually, he said this. He said, "One cannot detain individuals for perpetuity, and charges must be brought against them, and give them a chance to explain themselves and prosecuted, charged, or released. I think it's something that is common under any legal system, and I think sooner or later there will be a need to close Guantanamo." Do you agree with Kofi Annan?

HARMAN: Well, I certainly agree with his definition of the problem. It was shameful that we didn't have a legal framework around the detentions we did in this Iraq war. We did it in the first Gulf War. We had battlefield tribunals that sorted people out.

This time, I guess this president thought he had inherent authority again to do it some different way. I think the courts will require him to give each detainee a status. I think we may have to close Guantanamo. I was personally disappointed three times to go down there and not hear the straight story about what was going on there from those who briefed me.

BLITZER: What do you think, Senator?

CHAMBLISS: Well, I think from Kofi Annan's perspective, he's been pretty disengaged in the overall war on terrorism. Gitmo has served us well, even though we really had to figure out a way to deal with a massive number of prisoners in a short period of time. But we've done a lot of work down there, and we are treating those folks the way they ought to be treated.

Frankly, they're getting better medical care, better food, better housing than probably most of them have ever had in their lives. We're still getting valuable information from them, particularly with reference to the structure of al Qaida. So it's a necessary facility that needs to remain in place for some period of time. Forever, no. But for some period of time while we continue to fight this war.

BLITZER: But as you know, a lot of those detainees have been released. No charges have been filed. They've gone back to their home countries, Senator. Are you confident that all of those 500 or so who are there deserve to be there without any real due process afforded them?

CHAMBLISS: Wolf, a lot of them have been released, and we have found them back on the battlefield fighting American soldiers. We have to vet these individuals very thoroughly and make sure that we do the very best job we can to determine whether or not they really are bad guys still where they're going to come after us again.

If we're satisfied they're not, that they're really not criminals, then that's the point in time we can release them. But if there's the potential for them to come back and kill American soldiers and on the battlefield, then no, they shouldn't be released.

BLITZER: All right, go ahead, Congresswoman. Then we'll take a break.

HARMAN: I was just going to say we need a legal framework around all these issues: detentions, interrogations. Congress forced the administration to take the McCain amendment. And this NSA program. It has to comply with the Foreign Intelligence Surveillance Act, and it has to comply with the fourth amendment.

BLITZER: We'll leave it there, but we're going to continue down the road. We have a lot more to talk about, including warrantless wiretaps, domestic surveillance. In a moment, more on the war on terror with Senator Chambliss and Congresswoman Jane Harman.

But up next, we'll have a quick check of what's in the news right now. Stay with "Late Edition."

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(NEWSBREAK)

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(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm doing the right thing. Washington is a town that says you didn't connect the dots and then, when you do connect the dots, they say you're wrong.

In order to protect America, if somebody's talking to Al Qaida, we want to know who they are and why they're talking to them.

(APPLAUSE)

(END VIDEO CLIP)

BLITZER: The president, speaking out earlier this week, defending the National Security Agency surveillance program without warrants.

Welcome back to "Late edition."

Once again, I'm joined by Republican Senator Saxby Chambliss of Georgia. He's in Atlanta. And in Los Angeles, Democratic Congresswoman Jane Harman of California.

Senator Chambliss, Senator Roberts was quoted in the New York Times as saying, yesterday, this: "I think it should come before the FISA court. We should be much more in concert with the Congress and everybody else and the FISA court judges" -- FISA, the Foreign Intelligence Surveillance Act.

In effect, distancing himself from the Bush administration, now saying that the NSA warrant-less wiretapping program should be under the jurisdiction, if you will, of this FISA court.

Are you in agreement with your chairman, Senator Roberts?

CHAMBLISS: Well, I'm not sure that's exactly what Pat meant. Let me tell you the problem with the FISA court in this issue. The FISA court works well for what we use it for now.

We use it for anybody in the United States who is a foreign agent, or an agent of a foreign power -- we can surveil them -- or a U.S. citizen who also is engaged as an agent of a foreign power and who we suspect has committed a crime.

That's a pretty stringent requirement right there. But it's worked well. What we're talking about here is something entirely different.

These are phone calls that did not originate inside the United States. They originated outside the United States. And going through the FISA process to get a hold of a number that we don't know is going to be called until it actually is called simply is not going to work, either in the short, immediate term or, really, on the longer-term basis.

BLITZER: Congresswoman Harman, you're one of the so-called gang of eight, those leaders in the intelligence committees, the leadership in Congress, who have been briefed on what is going on.

Do you think it should be brought under FISA or kept separate, that the president has this blanket authority to authorize it?

HARMAN: I think it should be brought under FISA. I think that this is a capability we need. But it must strictly comply with the law and with the Fourth Amendment.

The president is not above the law. His legal arguments just don't wash here. FISA contemplated a 15-day period after the declaration of war when one would not need warrants.

It's been four years after the declaration of war on Afghanistan and the president is still claiming this inherent authority.

I believe that FISA has been modernized by Congress in eight respects and fully covers any activity that the president should want to accomplish under this program.

And I also believe that he's violating the National Security Act of 1947 by failing to brief Congress completely and fully.

BLITZER: On that matter, Senator Chambliss, the Senate Judiciary Committee, chaired by Arlen Specter, has had some extensive hearings on this surveillance program.

But the Senate Intelligence Committee hasn't. And Senator Roberts, the chairman says he doesn't want to have these hearings.

Listen to what he said this week.

(BEGIN VIDEO CLIP)

U.S. SENATOR PAT ROBERTS (R-KS): I believe that such an investigation at this point basically would be detrimental to this highly classified program and our efforts to reach some accommodation with the administration. This program is one which I believe is vital for the protection of the American people.

(END VIDEO CLIP)

BLITZER: Critics will argue, as you well know, Senator Chambliss, what happened to Senate intelligence committee oversight if the chairman isn't even willing to have hearings, to have an investigation on what's going on?

CHAMBLISS: Well, the chairman's not willing to have public hearings. And I think it's pretty obvious why. You can't have public hearings on classified issues like this. The judiciary did have -- committee did have some. Attorney General Gonzales came.

And he was limited as to what he could say. We did have a rather extensive hearing with General Hayden and Attorney General Gonzales and the Senate intelligence committee, and I think Jane and Pete Hoekstra had the same thing on the House side. We got fairly detailed briefings but not as -- they did not go as far as, frankly, I think they should have gone. But I think at the end of the day, here's what's going to happen on the Senate side.

We're in negotiations right now under Pat's leadership, Chuck Hagel, Olympia Snowe, Mike DeWine, who have had real concerns about this, have been talking to the White House over the last two or three weeks. And the White House has now agreed that a legislative fix for this is possible, and that more extensive briefings on a regular basis should be given to Congress. The exact details of that are being worked out, and I'm very hopeful that's going to be done by the time we get back after this Presidents' Day break.

BLITZER: We have to leave it right there. Senator Chambliss, as usual, thanks very much for joining us. Congresswoman Harman, thanks to you as well.

HARMAN: Thank you.

CHAMBLISS: Thank you, Wolf.

BLITZER: And still ahead, when Iraqi forces stand up, coalition forces will stand down. That's a standard line in President Bush's speeches. But how much longer will that take? We'll get some insight from the retired U.S. Army general who was assigned to train those Iraqi forces.

And later, my special conversation with the United Nations Secretary-General Kofi Annan, who met this past week with President Bush at the White House. "Late Edition" will be right back.

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BLITZER: Welcome back to "Late Edition." One week after President Bush stood under a "mission accomplished" banner and declared the end of major combat operations in Iraq, U.S. Army Major General Paul Eaton was ordered to Iraq, ordered to begin the rebuilding of the Iraqi military. He was given a staff of six to do the job. Now retired after 33 years in the U.S. military, General Eaton joins us from Seattle. General, thanks very much for joining us. Welcome to "Late Edition."

EATON: Top of the morning, Wolf. Thanks for inviting me.

BLITZER: This came totally out of the blue to you, this order to go over to Iraq right after that May 1, 2003 speech, and to start building a new Iraqi army. Is that right?

EATON: Right. I was the commanding officer of the infantry center, chief of infantry for the U.S. Army, and scheduled to eventually go to a Pentagon assignment. And I got a call one day that the chief of staff had selected me to go forth and perform essentially the Title 10 requirements, man, train, equip nine light motorized infantry battalions for the Iraqi army, for the new Iraqi army.

BLITZER: What did you find when you got there?

EATON: After making my way to Baghdad, I rolled in on a group of folks who'd come in from Centcom, and the terrific turmoil in Baghdad had started to settle down and we just rolled our sleeves up, basically a fellow named Roland Tiso, Mike Greer and Bob Summers, terrific people, and set out to craft the infrastructure and to chart the way ahead for the new Iraqi army.

BLITZER: Now, you've been quoted as saying what you inherited, in your words, was a disjointed fiasco. What did you mean by that?

EATON: The preparation for the mission that I had rolled in on was incomplete. And the planning had been superficial, and it was really a dream mission for me because it was a package delivered to me that the team that we had assembled could actually resurrect a coherent program, which we did in about three or four days, and then set out to do the manning, training, equipping piece for the army to really lay the groundwork and the structure for the future of that country's security.

BLITZER: So, it was an important mission to rebuild the Iraqi army, which was then in the process if it hadn't already been disbanded, had been disbanded. Some 400,000 Iraqi troops basically either on their own or told you're no longer in the Iraqi army. Was that a huge mistake?

EATON: No -- well, Wolf, it's a great question. It's been posed a number of times. But the 23 May decision that Ambassador Bremer made to stand down the old Iraqi army, you've got the dynamics of a country that's 20 percent Sunni but it's 80 percent Sunni Kurd -- Kurds are by and large Sunni -- and 50 percent of the country's Shia. So who do you want to alienate?

Had we kept that old army, brought it back on the books in toto, we would have perhaps mollified the Sunni Arabs. But at the same time we would have grossly, seriously alienated, I believe, the Kurdish population in the north and the Shia population in the south and set the stage for some serious problems. History's going to be the judge, but that's the way I saw it.

BLITZER: Here's what Ambassador Bremer said the other day here on CNN. Listen to this.

(BEGIN VIDEO CLIP)

PAUL BREMER, FORMER U.S. ADMINISTRATOR IN IRAQ: People need to remember, that military had conducted a genocidal -- decade-long genocidal war against the Kurds in the north, had killed hundreds of thousands of Shia in the uprising in 1991. To recall that army would have been to suggest to the Iraqi people we came to throw out Saddam but to impose some other colonel on them.

(END VIDEO CLIP)

BLITZER: So, what I hear you saying is that you basically understand and agree with the decision to allow the Iraqi army to be disbanded?

EATON: I not only agree, but I accept it as a fact. When I rolled in there, all of the military infrastructure had been destroyed. There were walls up, roofs on, but that was it. Doors, windows gone. Trucks had their engines removed. The wheels were gone. There was essentially nothing left but a few uniforms and steel pots lying on the ground outside of the barracks areas.

BLITZER: I was going to move on to the next level, then. So you're now in charge of training this new Iraqi army, but based on what I'm hearing, you never really got the support during that first year that was so critical that could have gotten the job well under way. It was sort of missed opportunity after missed opportunity, the Pentagon, for whatever reason, never giving you the authority or the wherewithal to get the job done.

EATON: A two-part answer and a good news/bad news: The good news is the United States Army, the Marines, our coalition forces stepped into the breach to do the right thing.

They didn't have enough soldiers to do the missions that they had. They were undermanned for the so-called phase 4. But we had terrific response on the part of the sergeants, lieutenants, captains, and colonels to get after the problem in a local fashion.

At the same time, I was given -- in fact after a 5 September briefing to the secretary of defense -- I was given the budget and the authority to move out, but there was still a failure on the part of senior leadership in the Pentagon to award the sense of urgency that we really needed from the very large staff that we had at the Pentagon. BLITZER: And that missed opportunity is plaguing the U.S. military right now. I assume you agree with that.

EATON: Wolf, if you take a look at national interests and the interest that we have in the success of other armies in this world, after our own, we've got to pay very close attention to the viability of the South Korean army, the viability of the Israeli army, and we've got to truly get after the viability of the Iraqi army.

And, to date, we are not putting the appropriate resources to help Marty Dempsey, Dan Bolger, Joe Peterson in the prosecution of the mission that they've got over there.

BLITZER: Is it a lack of sufficient forces? They don't have enough U.S. troops on the ground? Is that what you're saying?

Right now, from the very beginning, we did not put enough boots on the ground to prosecute phase 4 of this war. And we still have not awarded the appropriate resources to the men and women charged with assisting Iraq in rebuilding its security forces.

BLITZER: You have said that your big mistake was that you assumed that during that initial battle for Falluja when Iraqi forces went in, they would fight alongside the U.S. and coalition forces. But in the end, they simply ran away and disappeared. Is that right? EATON: Wolf, they didn't run away. What happened -- they did not feel, internally, inside themselves, that they were a legitimate instrument to provide security for the nation of Iraq.

We had recruited these men under the previous program, under the initial program, to defeat enemies from without.

These young men signed up to fight external enemies. When they were first sent into Falluja by ground, they ran into a fire storm of the Mahdi army, the Shia, en route, who basically heckled them and then fired a few rounds into the formation -- why are you attacking your fellow Iraqis?

And we had not developed, internally and externally, the sense of legitimacy that sustains armies if they have to be applied for security problems internal to their borders. That was the basis of the problem.

And my problem, my failure, was to recognize that we had not developed the sense of -- internal sense of legitimacy within these soldiers to allow them to fight alongside Marines. And I regret that mistake.

But it was an intent to get these men and to allow Iraqi security forces to assist coalition forces in the security drama that we had in Falluja. BLITZER: General Eaton, we have to leave it there. Thanks very much for joining us. Thanks for your 33 years of service in the U.S. military. I appreciate it very much.

EATON: Thanks, Wolf.

BLITZER: And, up ahead, we'll have a quick check of our Web question. And the Web question is this: Should the United States close the Guantanamo Bay prison? You can cast your vote at CNN.com/lateedition. We'll have the results in the next hour.

You're watching "Late Edition," the last word in Sunday talk.

(COMMERCIAL BREAK)

BLITZER: Welcome back. In a moment, my conversation with the U.N. Secretary-General Kofi Annan. First, though, let's get a quick check of what's making news right now.

(NEWSBREAK)

BLITZER: The Palestinian parliament convened this weekend with the militant Hamas party in the majority. John Vause is joining us live from Jerusalem with the latest Palestinian and Israeli reactions. What is the latest, John?

JOHN VAUSE, CNN CORRESPONDENT: Well, Wolf, today, the Israeli cabinet backed away from some of the toughest sanctions it had been considering after Hamas was sworn into parliament, instead opting for a permanent freeze on the taxes collected by Israel on behalf of the Palestinian authority.

That's about $50 million U.S. dollars reach month, about half of the monthly wages for 140,000 employees of the Palestinian authority.

Hamas says this move by Israel is nothing more than theft. Israel says, on a practical level, it had no choice because there were no guarantees that the money would not be used to fund militant attacks.

Israel is also calling on the international community for donor countries to stop direct aid payments to the Palestinian Authority, while calling at the same time for a continuation of humanitarian projects in the West Bank and also in Gaza.

Now, despite this looming cash crunch, Hamas is moving on with forming a government, today, nominating Ismail Haniyeh as the prime minister. He has three weeks to form a cabinet. Wolf?

BLITZER: John Vause, with the latest from Jerusalem. Much more on this story coming up when we'll speak with the ambassadors here in Washington from Germany, France and Britain.

Earlier this week, Kofi Annan, the secretary-general of the United Nations, met with President Bush over at the White House to discuss problems around the globe. (BEGIN VIDEO CLIP) BUSH: I enjoy visiting with the secretary-general. It gives us a chance to talk about our common interests and our desire for peace and liberty around the world.

(END VIDEO CLIP)

BLITZER: Shortly after the meeting, I spoke with the secretary- general and began by asking him whether the Iranians are building a nuclear weapon.

(BEGIN VIDEOTAPE)

KOFI ANNAN, U.N. SECRETARY-GENERAL: I think the rules are very clear. Iran can develop peaceful nuclear -- have peaceful uses of nuclear energy but not a nuclear bomb. And this is what the whole debate is about.

BLITZER: Even as we speak, there are reports today that the Iranians have started enriching uranium, which experts believe could lead to a bomb.

What is the United Nations going to do to stop Iran from becoming a nuclear weapons power?

ANNAN: I think, first of all, the atomic agency in Vienna is dealing with this. And between now and the end of the month, they are preparing a report, working with the Iranians, monitoring the situation, and will give a report to the agency at the end of the month.

There will be a meeting in March where, depending on the nature of the report, if indeed Iran is not meeting its obligations on the NPT and its obligations to the IAEA, it will be referred to the Security Council for appropriate action.

BLITZER: Appropriate action being diplomatic sanctions or economic sanctions? Would that be the next step in the pressure on the Iranian regime?

ANNAN: That will be for the Council to decide, but, obviously, the Council doesn't -- these are some of the arsenal that the Council has, but it will be up to the Council to decide what the next step should be.

And I think it will depend very much on the report. If the report is a negative one, then the Council has a tough and urgent decision to take.

If it is a report that indicates that, despite their public pronouncements, the situation is either frozen or is -- or they see prospects of full cooperation with the agency, the Council will have to factor that in.

I hesitate to prejudge what the Council will say or prejudge what the report will contain. BLITZER: How worried are you, though, that, if these pressures on Iran don't work, there could be military action, there could be action by the United States or Israel or a combination thereof or other countries?

Just as the United Nations failed to prevent the United States from invading Iraq with its allies and removing Saddam Hussein, how worried are you there could be a military confrontation, a unilateral U.S., let's say, attack at these nuclear sites in Iran?

ANNAN: I hope we never get to that point. I hope the international community will be able to work together and with Iran to negotiate an acceptable solution out of this.

I don't think, given the situation in today's world, that anyone would want to see further military escalation in the region. And Iran should cooperate and cooperate fully.

And I have urged them publicly to freeze the nuclear program to allow for negotiations to resolve this.

I do not know why they canceled their meeting with the Russians and if it is going to be rescheduled or if it's indefinite, but I would urge them to pursue the option that the Russians have offered and work with the European troika and others to resolve this crisis.

BLITZER: France, Germany and Britain, the troika.

Let's talk about Iran. The secretary of state, Condoleezza Rice -- you met with her today.

She is accusing Iran and Syria of fanning the flames, if you will, over this cartoon uproar involving the Prophet Mohammed.

Listen to what she said the other day.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, U.S. SECRETARY OF STATE: Iran and Syria have gone out of their way to inflame sentiments and to use this to their own purposes. And the world ought to call them on it.

(END VIDEO CLIP)

BLITZER: She says the world ought to call them -- Iran and Syria -- on it. You're the world. You're the United Nations secretary- general. Are you going to call Iran and Syria and tell them, don't fan these flames?

ANNAN: First of all, let me say that the violence we have seen is unacceptable. It is the wrong reaction to the offense and the insult that the Muslim world feels about the cartoons.

I have said very clearly that it was insensitive to publish those cartoons. I am for freedom of expression. I am for freedom of press. But that right has to be exercised with some sensitivity, some respect for religion of others, and it entails responsibility and judgment. And so, the fact that they feel offended by that should not allow any country or any group to attack innocent people and to destroy foreign legations. And so I would urge all governments and all people with influence, secular and religious, to ensure that we calm the situation and do not allow it to get out of hand.

BLITZER: Yesterday I interviewed the prime minister of Denmark, Anders Fogh Rasmussen, who said he agrees with Condoleezza Rice that Iran and Syria are making these situations even worse. Do you agree that they are doing that?

ANNAN: Well, I do not have any evidence to go by that. You had demonstrations all over the world.

BLITZER: But let me interrupt with all due respect, when you have no evidence. You know Damascus. This is a country where the police rule the day. If the government didn't want these people to burn down the Danish Embassy, they wouldn't have gotten close to that embassy.

ANNAN: The government has the responsibility to prevent these things from happening. They should have stopped it, not just in Syria or Iran but all around they should have stopped it. And not only should they have stopped it, not having stopped it, I hope they will pick up the bill for the destruction that has been caused to other foreign countries, which would also be legitimate. They should be prepared to pay for the damage done to Danish, Norwegian and the other embassies concerned.

Yes, one may say the government -- I had raised this with the ambassador of Syria in New York. I said, why couldn't you stop it? Of course, his answer was, it was so spontaneous we couldn't stop it. So the question has been posed, but in any event, all governments have a responsibility to stop this, to de-escalate, and in situations where they are not able to protect embassies and people they have the responsibility to protect, there has to be a cost.

BLITZER: The co-founder of Hamas, Mahmoud al-Zahar, said last week, he said this: "We should have killed all those who offend the Prophet, and instead here we are, protesting peacefully." This is the man who is now emerging as one of the key leaders of the Palestinian community now that Hamas has won this election. This is a serious issue, whether the United Nations and other international organizations, countries, should deal with the Palestinian Authority that is dominated by Hamas.

ANNAN: I think when the quartet met, we...

BLITZER: The quartet is the United States, Russia, the European Union and the United Nations.

ANNAN: ... we made it very clear that Hamas, now that it's won the elections and is going to assume the responsibility for the government, has to transform itself into a political party. It has to accept all the engagements entered into by the Palestinian Authority, including the Oslo agreements and the road map. It has to accept the two-state solution, which implies recognition of Israel and it has to renounce politics... BLITZER: Terrorism.

ANNAN: Terrorism. It has to renounce terrorism. And if it did that, the international community, and I'm sure Israel, would deal with them, and it is something that is on the table. There is a transitional government in office headed by President Abbas with his team, and they have time to be able to change their policy and accept the requirements -- it's not only the quartet demanding that they do this. Leaders in the Arab region from President Mubarak and others are asking them to go to the same direction.

BLITZER: Well, it raises an interesting question. And I know you discussed this with the president today. I assume you discussed it -- was the vice president at that meeting as well?

ANNAN: He was there.

BLITZER: All right. This is what he said on February 3.

ANNAN: Who said?

BLITZER: The vice president, Dick Cheney. He said, their, referring to Hamas, "Their objective, part of their platform is the destruction of Israel. They are a terrorist organization. They need to give up their objective of the destruction of Israel. They need to forswear violence and I think close down their military wing before anybody is going to treat them seriously as a legitimate interlocutor."

Is the United Nations going to treat the Palestinian Authority as a legitimate interlocutor with Hamas failing, at least so far, to accept a two-state solution and renounce terrorism?

ANNAN: I think if you put it that starkly, I don't think it's -- we have made it very clear in the quartet and given them -- and U.N., United Nations, is part of the quartet. Yesterday there was quite a bit of excitement that the Russian federation has invited Hamas to Moscow. What was the purpose of that invitation?

In my own discussion with Foreign Minister Lavrov, he made it clear that we are bringing them to Moscow to reaffirm the three principles that the quartet has asked them to fulfill: renouncing violence, accepting the two-state solution and accepting all the earlier engagements entered into. You need them to press the point home with Hamas.

BLITZER: The U.S. Ambassador, John Bolton, to the U.N. said the other day, "It's not just simply this incident or that incident of corruption or mismanagement, but a culture problem at the U.N. that we're facing here." Is he right? ANNAN: Well, Mr. Bolton is relatively new at the U.N. Obviously, he has a right to his judgment. But, in fact, I will say in discussing this, the whole issue of who is U.N. and what is U.N. with the Oval Office, I said, it's an interesting situation. When we get into trouble and there's a problem with the U.N., they refer to the U.N. as if it's a secretary or some satellite out there. The member states have nothing to do with it, and yet the U.N. is its members. The U.N. can be as effective as its member states want it to be. I mean, we've slammed as corrupt, inefficient, oil for food, and yet when you analyze the report of Volcker, the scandal was with the member states and the government and the companies, not with...

BLITZER: But...

ANNAN: ... no, wait, let me say, not with the secretary. Yes, there was some mismanagement, but when it comes to corruption, only one staff member was found to have possibly have made $150,000. Of the $11 billion that was smuggled out, the secretariat had nothing to do with it. The 1.8 that was made through deals between companies and Saddam Hussein, companies promoted by their own governments, companies with contracts was approved by the 661 committee, you don't hear anything about corruption of the...

BLITZER: Here was the problem. With hindsight, I want your thought. The perception that your son Kojo got involved in a business deal in this oil for food, a United Nations-sponsored program, with hindsight, was that a mistake to let him do that?

ANNAN: I did not let him do that. To say to let him do that is wrong.

BLITZER: Did you know about it in advance?

ANNAN: I did not know about it in advance, and not...

BLITZER: You wish he wouldn't have gotten it.

ANNAN: Absolutely. I wish he had not been involved. But also in the whole investigation, at the end of the report, they did not find that -- it said that he had called the procurement department, and they did not come up with anything that he had really influenced the contracting. And not only that...

BLITZER: But the perception the son of the secretary-general involved, that would help that company.

ANNAN: It was not pleasant for me. I wish it had not been done. It gave me lots of grief. You must also know that he -- "Sunday Times" of London came up with an article that he had been involved with the Iraqi oil-for-food contract, and he won his -- he took -- came up with a libel suit, and they settled out of court because they knew it was wrong.

But what it is is, yes, that was true, but when you read the story, the issue was, secretary-general's son may have influenced a company to get a contract. Staff member took some money, and so forth and so forth, but the big picture was lost.

(END VIDEOTAPE)

BLITZER: Kofi Annan, the U.N. secretary-general, speaking with me here in Washington earlier in the week. And coming up on "Late Edition," tens of thousands have been killed in the civil war in Darfur and the Sudan. Millions have been made homeless. Should the U.S. and its NATO allies now dispatch troops to the region?

And in just a moment, the ambassadors of three key NATO allies will weigh in on this, the Hamas victory, Iran's nuclear ambitions and lots more. This is "Late Edition," the last word in Sunday talk.

(COMMERCIAL BREAK)

BLITZER: Welcome back. The tense nuclear negotiations with Iran, the uncertain Middle East peace process, the war on terror -- all global issues where the United States and Europe work very closely together.

Joining us now to discuss these issues and more are the representatives here in Washington of three key European nations. Wolfgang Ischinger is the ambassador of the Federal Republic of Germany. Jean-David Levitte is the ambassador of France and Sir David Manning is the British ambassador to the United States.

Gentleman, thank you very much for joining us.

And let me start with you, Ambassador Levitte. The Israeli Cabinet, the Israeli government has now decided to take several steps to prevent any contacts, if you will, with the Palestinian Authority now that Hamas is part of that Palestinian authority.

Does the government of France support that?

JEAN-DAVID LEVITTE, FRANCE'S AMBASSADOR TO U.S.: Well, France, as well as the E.U. countries has stated clearly that Hamas is a terrorist organization. That's number one. It means that we have no contacts with Hamas.

And we are waiting for the new government -- now we have a new parliament. We have the president of the Palestinian authority, which remains Abu Mazen.

And there will be a kind of cohabitation between the president of the Palestinian Authority and the new government.

So our position is to wait and see what the new government will have to say about our three demands.

BLITZER; If the prime minister of the new government is from Hamas as opposed to Mahmoud Abbas, Abu Mazen, who is the president of the Palestinian Authority, will the government of France have direct contact with the Palestinian Authority if it has a Hamas prime minister? LEVITTE: We have stated that there are three demands. And we are waiting for the answers of the new government to these three demands. And, accordingly, we will review the situation and decide.

BLITZER: So do I understand it -- if in fact there is a Hamas prime minister and those demands have not been met, you will suspend contact with the Palestinian Authority?

LEVITTE: Well, we have no contacts at all for the time being because it's a terrorist organization.

BLITZER: And what about the government of Germany?

WOLFGANG ISCHINGER, GERMANY'S AMBASSADOR TO U.S.: Same position, Wolf. And I think I should add to what my friend Jean Levitte has said, that we had discussions about the right approach in what is called the quartet between the United States, the European Union, the U.N. and Russia.

And there was, as I understand it, broad agreement that that's the right way to move forward. So we are -- the E.U, and its member countries -- we are waiting to see what kind of government is going to be installed and what that government is going to say about these exact three points: the right of Israel to exist, renunciation of violence and is that government willing to accept existing agreements with Israel -- yes or no?

That's the criteria.

BLITZER: Ambassador Manning, I assume the British position is the same as the German and the French, or is there any difference you want to explain?

SIR DAVID MANNING, GREAT BRITAIN'S AMBASSADOR TO U.S.: No, it's exactly the same. And, in fact, when my prime minister, Prime Minister Blair, was talking to Chancellor Merkel last month in Germany...

BLITZER: The new chancellor of Germany?

MANNING: Indeed. They set out exactly those three conditions. And Prime Minister Blair has also made the point that we are clear -- and I'm sure this is the position of the U.S. administration -- that there has to be a two-state solution.

You cannot engage one side if they're denying that the other side has a right to exist. So we would like them to accept these three propositions that my colleagues have spelled out. And then we can move forward with the peace process.

But, unless they do that, there can't be a peace process.

BLITZER: And, in the interim, what happens to financial assistance to the Palestinians from the government of Britain, shall we say?

MANNING: Well, at the moment, we are continuing with the assistance that we have adopted. And, as my French colleague said at the beginning, we're waiting to see how this government reacts. Let's remember, it's only just forming now. We don't know exactly what position it will take.

We are very conscious of the humanitarian issue here. so there is a real humanitarian issue and I notice that the Israeli cabinet have picked up on that over the weekend.

But the position is clear. If we don't meet -- if the new government doesn't meet these criteria, we will be reviewing our support.

BLITZER: Here's what the president of the United States said in explaining the U.S. position toward a Palestinian authority with Hamas. Listen to this.

(BEGIN VIDEO CLIP)

BUSH: I have made it very clear, however, that a political party that articulates the destruction of Israel as part of its platform is a party with which we will not deal.

(END VIDEO CLIP)

BLITZER: Now, the quartet -- you've spoken of the quartet, the United Nations, the European union, the United States and Russia. One member of that quartet seems to be out of sync with the rest of you. That would be Russia.

Listen to the president, Vladimir Putin.

(BEGIN VIDEO CLIP)

PRES. VLADIMIR PUTIN, RUSSIA (THROUGH TRANSLATOR): Russia is maintaining contacts with the Hamas organization and intends in the near future to invite the leadership of this organization to Moscow.

(END VIDEO CLIP)

BLITZER: Ambassador Levitte, is that a good idea?

LEVITTE: We've not been consulted on that. I don't want to comment on that.

We have these three demands and I think that they are accepted by all the members of the quartet. Now, up to Russia to decide what, as a nation they want to do, but this is not our position. We have no contacts with Hamas.

BLITZER: What about the German position on the Russian invitation to Hamas to come to Moscow?

ISCHINGER: Well, I would say, quite generally, that my government's position is that those countries that do not observe the same rules that we do, namely, regard them as terrorists and not talk to them at this point -- we expect those governments, if they decide to have contacts with this organization, to be very strongly endorsing our position, namely, to demand of Hamas, if they are going to be the party in power in the Palestinian Authority, to move their position forward and to agree to these three points of principle.

BLITZER: Ambassador Manning?

MANNING: I have little to add, Wolf. We weren't consulted, either. We are absolutely firm in the position taken by the quartet. And I think what Wolfgang has just said is absolutely right.

Anybody who has contacts with Hamas in any shape or form in the next few days and weeks needs to make it clear that those are the three conditions that are essential.

BLITZER: We have a lot more to talk about, including the cartoons of the Prophet Mohammed, the reaction in much of the Muslim world. Also, what's happening at the U.S. naval base at Guantanamo Bay in Cuba.

We're going to continue our conversation with these three ambassadors here in Washington right after we take a short break. Much more coming up on "Late Edition."

(COMMERCIAL BREAK)

(NEWSBREAK)

(COMMERCIAL BREAK)

BLITZER: Welcome back to "Late Edition." I'm Wolf Blitzer in Washington. We continue our discussion with Wolfgang Ischinger, the ambassador of the Federal Republic of Germany, Jean-David Levitte, the ambassador of France, and Sir David Manning, the British ambassador to the United States.

Let me begin with the German ambassador right now. We've seen the outrage in much of the Muslim world to the cartoons published in a Danish newspaper of the Prophet Mohammed, but many are suggesting this is indicative of a much bigger problem, especially in Europe, a clash of cultures, if you will, between Europeans, the west and Muslims, including many immigrants who have come to Germany or France or Britain over these recent decades. Is this part of a bigger problem that we're seeing?

ISCHINGER: I think we're discovering that it is, in fact, a bigger problem than many thought, the fact that there is this huge debate about freedom of speech, freedom of expression and how we should be respectful of religion. Our western culture is a culture that has always tended to be respectful of other religions.

I think it's true that there is a huge debate going on, not only in those countries in Europe that have been directly affected, such as the Danish, our Danish friends, but throughout Europe. What's the important thing to remember? I think all of our governments have said and have made very clear that while the principle of freedom of speech remains essential for free countries and for democracy, we also as governments need to remind ourselves and our citizens that we should be respectful.

Having said that, I think we've really made big efforts as governments to observe these standards. Having said that, nothing, nothing justifies violence. Nothing justifies burning embassies.

BLITZER: And France, weeks ago, even before the cartoons became a big issue we saw violence in the suburbs of Paris and elsewhere in France. How big of a problem is this in France right now, this divide, if you will, between the Muslim immigrants from North Africa and the Middle East to France, which now may be 10 percent of your population? LEVITTE: It's eight percent of our population, but, Wolf, it had nothing to do with religion. It was more about inclusion, how these young generations can be better integrated in the social fabric of France, so it has nothing to do with religion.

BLITZER: You don't think there was a, whether a racial or ethnic prejudice that was part of this problem?

LEVITTE: Well, there may be prejudice, how to get a good job, how to get good schools, housing, these were the problems. These were the reasons why there were these demonstrations in the poor neighborhoods around our big cities, but it had nothing to do with religion at the time.

BLITZER: What about in Britain? Is there any rethinking of the immigration policies of Britain that's under way right now?

MANNING: The immigration policies are always being reviewed, Wolf. It's not triggered simply by this. We have to look about immigration in the round. It's about economic performance. It's about our European Union responsibilities and so on.

But of course, it's raised questions for us. If you have bombs on your underground railway system, of course you have a problem. We have been very conscious, I think, in Britain, ever since 9/11, and indeed before, about the need to try and make sure we become a successful, integrated society both ethnically and religiously.

But it's a big adjustment that we're asking society to make. And we have to work very hard at it.

BLITZER: This week, President Chirac suggested that Iran, now, is going forward and building a nuclear bomb. Explain what your latest intelligence is.

LEVITTE: Well, for three years, we've been negotiating with three countries that we represent with Iran. Why? Because we have deep suspicion about the motives. Is it only to produce nuclear electricity? Is it to build a bomb?

And we have asked (inaudible) that Iran suspend its activities which may lead to a bomb. It was applied, but unfortunately, after the election of President Ahmadinejad, a new policy has been implemented by Iran.

That is, they have started converting their uranium, which is the first step of enrichment. In the beginning of January, they have started enrichment.

So they crossed a red line and we have said, you put an end to the negotiating process, but the door is open -- up to you to decide. We expect you to go back to suspension.

And there will be a meeting on Monday in Russia because the Russians have proposed a way forward to solve the issue.

BLITZER: But the Iranians have rejected that. Ambassador Ischinger, what is Germany prepared to do if, in fact, the Iranians continue to maintain this policy, enriching uranium, rejecting that Russian proposal?

How far will Germany go in approving United Nations Security Council sanctions or economic, diplomatic, whatever sanctions to try to squeeze the Iranians?

ISCHINGER: If you had asked the three of us a year ago where we were, where the United States was, we could not have said in a very simple and straightforward way that we are united. Today, we are united.

BLITZER: Is there any daylight between the U.S. government's position and the positions of the so-called troika, the three countries that you represent, France, Germany and Britain?

ISCHINGER: Not one that I can see.

We decided together to make this decision to take the matter to the U.N. Security Council after the agency's next meeting in early March.

In other words, we have established a clear -- a unified approach. It's a Western approach. It's the United States and the E.U. three and, as a matter of fact, the entire European Union, working together.

And, more importantly -- and I think that's really the important point to make, the new point -- this effort undertaken by the E.U-3, strongly now supported by the United States, has also been receiving support, quite recently, actually, by such countries outside this group as Russia, China and a number of other important members.

BLITZER: So, Ambassador Manning, if the leaders of Iran, right now, are watching this program in Tehran, what do you hope they will emerge from this conversation, with what message?

MANNING: Well, as Jean-David Levitte said, the door is open to the negotiations, but it is up to them now. We cannot go back to a situation where they want the Paris agreement to continue to be discussed, when they have breached the red line.

BLITZER: What if they continue to say no? What will you do next?

MANNING: Well, we will certainly be going to the Security Council at the beginning of March.

First of all, there has to be a meeting of the International Atomic Energy Agency. And then, we will have a meeting of the Security Council to discuss what we do next.

And I don't want to prejudge where that will take us, Wolf, but that is the sequence of events. And the only way that can be stopped is for the Iranian government to make it clear that it is going to go back to the terms that were negotiated under the Paris agreement.

BLITZER: We're almost out of time. But should NATO develop a peacekeeping or a logistical support, get involved, with troops, in trying to save lives in the Darfur region of Sudan?

LEVITTE: Wolf, we all agree that we should do more. There is now...

BLITZER: Should NATO and U.S. troops be involved ?

LEVITTE: Well, NATO is involved already and will continue to be involved through planning, logistics, common structure. And we approve that.

BLITZER: What about boots on the ground, getting NATO troops, soldiers into Darfur? ISCHINGER: There's nothing wrong with trying to get more NATO support. There is nothing wrong. In fact, we should all make even greater efforts to -- through the E.U., through NATO, through the United Nations -- we are working in the process at the United Nations to establish a larger peacekeeping force.

The more support that force can get, the better. It is needed and our governments recognize that and are perfectly interested in helping to support this effort.

BLITZER: The British government, as well?

MANNING: We're in the same place, Wolf. The only caveat I would enter is that we have to be sensitive to what the African Union countries want themselves.

As therefore we have to make sure that, as we bring the international community into this process more effectively, that we are working with the African countries in doing so.

BLITZER: One final question to all of you and then I'll let you go: Should the United States shut down its prison at Guantanamo Bay?

LEVITTE: Guantanamo is an embarrassment. And so, it has to be solved one way or the other. It's necessary to have the people in Guantanamo get a fair trial.

BLITZER: What about the German position?

ISCHINGER: The sooner it's closed, the better it will be for the image of the United States, not only as a military and political but also as a moral leader, in the world. BLITZER: Does the British government agree?

MANNING: The prime minister said it's an anomaly. It needs to be dealt with. We understand the context. You've lost a lot of people. It's difficult to find the right line to draw between your duties as a government for security and safeguarding liberty, but it is clearly an anomaly and it needs to be dealt with.

BLITZER: "Dealt with" -- be more precise.

MANNING: Well, I think the United States government is the only one that can deal with it. But we are clear that it is an anomalous situation at the moment and we hope that the United States government will find a way of dealing with that.

BLITZER: Ambassador Manning, thanks very much.

Ambassador Ischinger, good luck on your next assignment in London. We wish you only the best. Come visit us in Washington down the road.

Ambassador Levitte, thank you very much to you, as well.

MANNING: Thank you very much.

ISCHINGER: Thank you.

LEVITTE: Thank you.

BLITZER: And, coming up on "Late Edition," we'll take a closer look at what's been said on the other Sunday morning talk shows, in case you missed it. We'll take a quick break. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: And now, in case you missed it, some of the highlights from the other Sunday morning talk shows here in the United States.

On ABC's "This Week," Democratic senator, Joe Lieberman, the ranking member on the Homeland Security and Government Affairs Committee, blasted the Homeland Security secretary, Michael Chertoff, as having failed during Katrina, and then went a step further.

(BEGIN VIDEO CLIP)

U.S. SENATOR JOSEPH LIEBERMAN (D-CT): FEMA has become to too many people in America, and particularly in the Gulf Coast, a joke, a four-letter word. It's time for FEMA to go, and to build something better, stronger within DHS.

(END VIDEO CLIP)

BLITZER: On CBS's "Face the Nation," Democratic Senator Barbara Boxer and the Senate Majority Leader Bill Frist disagreed over the political fallout from new government plans providing prescription drug benefits for seniors. (BEGIN VIDEO CLIP)

U.S. SENATOR BARBARA BOXER (D-CA): I think the more the American people look at this program, this legislation, that was crafted, in my opinion, to primarily benefit the pharmaceutical industry, the insurance industry, the more that that comes out, the more people will turn against the Republicans running this whole country.

U.S. SENATOR BILL FRIST (R-TN), MAJORITY LEADER: The fact that we are giving seniors affordable access to prescription drugs by choice, it's voluntary, that they didn't have before, of course it's not going to be a liability. I think it'll be a huge plus.

(END VIDEO CLIP)

BLITZER: On "Fox News Sunday," Republican Senator Lindsey Graham of South Carolina and Democratic Senator Evan Bayh of Indiana agreed on the need for increased oversight of the National Security Agency's wiretap program.

(BEGIN VIDEO CLIP)

U.S. SENATOR LINDSEY GRAHAM (R-SC): I do believe we can provide oversight in a meaningful way without compromising the program. And I am adamant that the courts have some role when it comes to warrants. If you're going to follow an American citizen around for an extended period of time believing they're collaborating with the enemy, at some point in time, you need to get some judicial review because mistakes can be made.

U.S. SENATOR EVAN BAYH (D-IN): It is in the administration's best interest to ensure that there is some neutral party overseeing this to make sure that it's done right. Otherwise, you're going to have a number of Americans out there who incorrectly think that J. Edgar Hoover's been brought back to life and that there could be abuses taking place.

(END VIDEO CLIP)

BLITZER: And over at NBC's "Meet the Press," the subject was Vice President Dick Cheney's hunting accident, where a Texas lawyer, Harry Whittington, was wounded. The New York Times's Maureen Dowd saw it very differently than Cheney adviser Mary Matalin.

(BEGIN VIDEO CLIP)

MAUREEN DOWD, COLUMNIST, THE NEW YORK TIMES: It covered all the problems of the Bush-Cheney administration: secrecy and stonewalling, then blowing off the rules that are at the heart of our democracy, then using a filter to try and put the truth out in a way that would most suit their political needs, and then bad political judgment and bungling a crisis.

MARY MATALIN, REPUBLICAN STRATEGIST: We're not undermining the hallmarks of the democratic institution, the freedom of the press. But it's much ado about nothing, or in the words of Harry Whittington, what's all the hoopla about?

(END VIDEO CLIP)

BLITZER: Up next, the results of our web question of the week: Should the United States close Guantanamo Bay prison? And we'll also have a look at your e-mail. First, though, this.

(BEGIN VIDEOTAPE)

BLITZER: Ibrahim al-Jaafari, what's his story? The Shiite leader has won his party's backing, and is set to head Iraq's first permanent government since the fall of Saddam Hussein. Since April, Jaafari has acted as interim prime minister, a term that has been marred by incessant insurgent attacks.

A medical doctor and religious scholar, Jaafari lived in London and Iran for a decade before returning to Iraq after the 2003 U.S.-led invasion. One of his toughest challenges will be creating a new government that's inclusive of Iraq's minority Sunnis who are behind much of Iraq's insurgency.

Emily Hughes, what's her story? She may have missed the opening ceremonies, but the U.S. figure skater is still hoping to strike gold. Hughes, the 17-year-old alternate for Michelle Kwan, was thrust into the Olympic spotlight this week after Kwan re-injured her groin and dropped off the U.S. figure skating team.

In her first year as a senior competitor, Hughes placed third at the U.S. nationals, but was bumped from the Olympic team when Kwan received a medical bye. Stalled by a blizzard in New York, Hughes, the younger sister of 2002 Olympic champion Sarah Hughes, is now in Torino, Italy, and insists that despite the delay, she's ready to compete in Tuesday's figure skating event.

(COMMERCIAL BREAK)

BLITZER: Our "Late Edition" web question asks, should the United States close Guantanamo Bay prison? Here's how you voted. Seventy- eight percent of you said yes. Twenty-two percent of you said no. Remember, this is not a scientific poll.

And that's it for your "Late Edition," Sunday, February 19. Please be sure to join us next Sunday and every Sunday 11 a.m. eastern for the last word in Sunday talk. I'm Wolf Blitzer in Washington.

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